Tele-Tech Updates Newsletter

FCC Clarifies Definition of "Toll Services"

On January 24, 2008, the FCC released an order intended to clarify how wireless and VoIP (Voice over Internet Protocol) providers should calculate their interstate and international revenues when they complete the forms used to determine USF contributions. Carriers that report to the FCC are required to divide their revenues among various categories, including fixed local service, mobile service and toll service.

The FCC clarified that, consistent with the definition set forth in its 2006 Contribution Methodology Order, "toll services" are "telecommunications services that enable customers to communicate outside of their local exchange calling areas," which for wireless carriers, means "outside the customer's plan-defined home calling area for an additional charge."

Accordingly, toll revenues reported for USF purposes generally would not include in-plan revenues (which would be reported as "mobile services"). For example, in the case of a calling plan that provides nationwide calling for a bucket of minutes, toll service revenue only would include the additional fees that are assessed for calls made outside that calling plan (such as international calls).

The FCC also noted that revenues associated with toll services are predominantly the result of domestic long distance and international calling and is often much higher than the per-minute revenue associated with a plan's bucket minutes. Therefore, the FCC clarified that on a going-forward basis, traffic studies must ensure that toll service revenues are accurately accounted for by weighting that traffic appropriately. The traffic studies "must account for toll service traffic that is assessed an additional charge(s) in a manner that reflects accurately both the jurisdiction of this traffic and the associated revenue."

Deadline Complying with LNP Validation Process Extended

The FCC has issued an Order granting Embarq's request to waive until Sept. 30, 2008, the deadline to comply with their ruling that the validation process for local number portability (LNP) be based on no more than four fields. They have also waived the deadline for all other affected companies until July 31, 2008.

The issue of LNP procedures under this Order originated on December 20, 2006. At that time, T-Mobile USA, Inc. and Sprint Nextel Corporation filed a petition for clarification on a ruling that carriers obligated to provide LNP may not obstruct or delay the porting process by demanding information from requesting carriers beyond that required to validate the customer request.

The recommended process was to organize validating port requests using just four data fields to improve efficiency for consumers. These recommended data fields were limited to: (1) the 10-digit telephone number; (2) the customer account number; (3) the 5-digit zip code of the customer; and (4) any applicable pass code. On Nov. 8, 2007, the FCC concluded that LNP validation should be based on no more than the four recommended fields for all simple ports, regardless of the context, be it wireline-to-wireline, wireless-to-wireless, and inter-modal ports. They gave the affected entities 90 days to comply, which they have extended with this recent order.

Wisconsin PSC to Investigate Telecommunications Regulation

The Public Service Commission of Wisconsin recently decided to comprehensively explore the level of regulation of telecommunication providers in the state. It announced that Commissioner Mark Meyer will lead the investigation. It was noted that the advent of new technologies, such as the explosion of wireless service providers, and changing modes of service options, such as major cable companies, were the main drivers behind the decision.

"Today we are looking at an entirely new telecommunications landscape than what we had just a few short years ago," said Meyer. "Under current law and PSC rules, not all providers for the array of services available in the state are subject to the same regulation. This review will allow us to provide Gov. Doyle, state legislators and other key decision makers information to help inspire and improve dialogue as the telecommunications regulation moves forward."

SCC Grants Partial Approval of Verizon Requests

The Virginia State Corporation Commission (SCC) has granted in part and denied in part Verizon's petition for modifications to the Commission's recent order, dated Dec. 14, 2007, deregulating certain local telephone services in areas of Virginia found to be competitive.

Verizon made four requests, each of which was ruled on separately.

The SCC approved the request that certain competitive local exchange carriers (CLECs) be considered "facilities-based" if those CLECs lease unbundled network "loops" from Verizon at wholesale prices. It was noted the FCC recently denied a request from the company to be relieved of such leasing obligations in the Virginia Beach area. The SCC found that as long as the FCC maintained this obligation on Verizon, CLECs leasing loops from the company were properly considered to be "facilities-based" competitors.

It also partially approved the request to count "over the top" VoIP providers as competitors to Verizon in local telephone exchanges where broadband availability has reached 75% of households or businesses. For residential telephone services, the SCC found that granting Verizon's request would grossly overstate the amount of actual competition presently posed by providers such as Vonage. The SCC found instead that the request should be granted for residential telephone services when available FCC data on residential broadband subscribership in the state, compared to total Virginia households, showed a sufficient level of subscribership penetration.

It denied a request to consider cable companies that were not offering telephone services as "facilities-based" competitors to Verizon, as well as a request to count wireless telephone providers as "facilities-based" competitors to Verizon's landline services. It did however include wireless providers as "non-facilities-based" competitors.

In summary, the SCC granted Verizon deregulation of over 62% of all residential lines and 57% of business lines, plus statewide deregulation of bundled services.

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NPA Updates

Geographic split for 304 Changed to Overlay

In a decision issued on Feb. 13, 2008, the Public Service Commission of West Virginia reversed their previous ruling of Jan. 29, 2008, to implement the new state area code with a geographic split.

In its decision, the PSC stated the two deciding factors for reversing their decision were; the geographic split would have imposed a disproportionate economic burden on that portion of the state being required to switch to the new area code and; those individuals familiar with the 10-digit dialing requirements imposed by other overlay plans in other states indicated that the current technology has alleviated most of the problems that formerly existed with ten-digit dialing.

The Commission also considered the possibility of applying the new area code overlay to cell phones exclusively and allowing land lines to retain the 304 area code, but decided it was not a realistically viable solution.

There has been no official announcement yet as to what the new area code will be.

New Mexico Public Regulation Commission Vacates Order on Area Code Split

The NMPRC vacated its order to show cause issued in October , 2007 because of problems with the implementation of the 505/575 area code split.

The order placed the burden on all phone companies to show why they should not be fined for violating the commission's area code orders. When the order was issued, there were a high number of consumer complaints. Many people were unable to dial into or out of the new 575 area code.

In the last three months there has been a substantial decline in consumer complaints, leading the Commission to vacate the order.

Provider Changes in Florida

The Florida Public Service Commission recently voted to take away the right for Vilaire Communications (VCI) to operate in the state. The five-member panel found the company showed a lack of the technical, financial and managerial capability needed to operate a telecommunications company.

A recent audit conducted by the PSC seemed to indicate that VCI overcharged customers for E911 calls and falsely obtained more than $1.3 million in funds earmarked to provide telephone services to low-income residents. VCI was an eligible telecommunications carrier (ETC) allowing it to obtain monies from the Universal Service Fund to provide Link-Up and Lifeline service to low-income customers.

PSC staff found VCI was billing its customers 75 cents per month for an E911 fee. Florida Statutes state the fee may not exceed 50 cents. The company has been ordered to refund all of the overbilled money to the customers. A random sample of the company's customers also indicated fictitious accounts for Lifeline service and questionable application of late fees.

AT&T Florida will temporarily take over telephone service for statewide residents who were using Vilaire Communications.